USDA loans are one of the few ways to buy a home with no down payment if you aren’t a Veteran. The program is run by USDA Rural Development and is meant for moderate-income buyers in rural and suburban areas. More of Indiana qualifies than most people expect.
What is a USDA home loan?
A USDA loan is a mortgage made by an approved lender and guaranteed by the U.S. Department of Agriculture. The guarantee lets lenders offer financing for up to 100% of the home’s value. The loan is a 30-year fixed-rate mortgage, and it can only be used for a home you will live in.
USDA loan requirements in Indiana
- Location. The home must be in a USDA-eligible area. You can enter any address on USDA’s map to check.
- Income. Your total household income must be within the USDA income limit for your county and household size. The limit counts the income of every adult in the home, not only the borrowers.
- Occupancy. The home must be your primary residence. Investment properties and second homes don’t qualify.
- Credit. USDA does not set a minimum credit score. Lenders set their own, and the lender I work with requires a minimum score of 580. Scores below 640 usually get a closer review.
- Property. The home must be safe, sound, and sanitary. Many manufactured homes can qualify.
USDA loan fees
USDA loans don’t have private mortgage insurance. They have two program fees instead:
- Upfront guarantee fee: 1.00% of the loan amount. It can be added to the loan.
- Annual fee: 0.35% of the loan balance, paid as part of your monthly payment.
USDA also charges a $25 technology fee, which can be financed. USDA can change its fees each fiscal year. You will also have normal closing costs, which a seller can agree to pay.
Where are USDA loans available in Indiana?
Eligible areas exist across the state, from Northwest Indiana to the areas around Vincennes and Evansville. Small towns and rural communities usually qualify, and some outer suburbs do too. I’ve helped buyers in:
- Jasper County
- Newton County
- LaPorte County (outside city limits)
- Starke, Pulaski, and White counties
- Rural areas of Porter and Lake counties
I’m licensed throughout Indiana, Illinois, and Michigan. Eligibility is set address by address, so send me the property, and I’ll check it.
USDA vs. FHA vs. VA
| USDA | FHA | VA | |
|---|---|---|---|
| Down payment | None for eligible buyers | 3.5% minimum | None for eligible Veterans |
| Location | USDA-eligible areas only | Any location | Any location |
| Income limit | Yes, by county and household size | No | No |
| Who can use it | Buyers who meet income and location rules | Most buyers who qualify | Eligible Veterans and service members |
If you’re a Veteran, compare this with a VA loan, which has no location or income limits. If the home isn’t in an eligible area, an FHA loan is often the next option.
Frequently asked questions
What are the requirements for a USDA loan in Indiana?
The home must be in a USDA-eligible area, your household income must be within the USDA limit for your county and household size, and the home must be your primary residence. You also need to meet the lender’s credit and income standards.
What credit score do you need for a USDA loan?
USDA does not set a minimum credit score. Each lender sets its own requirement. Scores below 640 usually get a closer review of your credit and payment history.
What fees does a USDA loan have?
USDA charges an upfront guarantee fee of 1.00% of the loan amount, which can be added to the loan, and an annual fee of 0.35% of the loan balance, paid monthly. USDA can change these fees each fiscal year.
Is a USDA loan only for first-time buyers?
No. USDA loans are available to first-time and repeat buyers who meet the income, location, and occupancy requirements.
How do I know if a home is in a USDA-eligible area?
Enter the address on USDA’s online eligibility map, or send me the address and I’ll check it. Eligibility is set address by address, and many small towns and rural areas in Indiana qualify.
Next step
If you’re looking at a home outside the city, send me the address and your household size. I’ll tell you whether the property and your income fit the program. Call 219-695-0369 or text me at 219-758-8072.
Get prequalified here or send me a message.
Source: USDA Rural Development, Single Family Housing Guaranteed Loan Program
